Drinking in the last three months of pregnancy can create problems with a baby's vision and hearing, the report says.

The inquiry concludes that all pregnancy and ovulation kits - as well as cans and bottles of alcohol - must be labelled with warnings for women not to drink while pregnant, within a year.

It rejects the alcohol industry's claims that warnings might scare some women into aborting their babies.

The report, tabled in parliament yesterday. warns that 60 per cent of Australian women drink during pregnancy.

Women in their 40s are more than twice as likely as the under-25s to drink while pregnant.

And the wealthier and better-educated the woman, the more likely she is to drink at some stage during the pregnancy.

The inquiry says these women "may be accustomed to enjoying alcohol in moderation at social events, or in the context of an evening meal".

The committee criticises an "alarming and irresponsible lack of awareness" by some doctors and midwives who continue to tell pregnant women that moderate drinking while pregnant is safe.

"The committee considers this a devastating failing in our health system," its report says.

The prevalance of FASD in Australia is not known, but the parliamentary report cites a Tasmanian Department of Health and Human Services estimate that at least two in every 100 babies are born with FASD.